Surprise Medical Bills
Recently there has been a spate of articles in the media regarding “surprise” medical bills. These are mostly instances where a patient is rushed to the Emergency Room only to emerge a short time later with a clean bill of health and a large hospital bill to go with it. While not yet a popular revolt, it has caught the attention of Congress and others* to possibly try and fix the problem.
While this has caught our attention too, it is not really a surprise. Traumas and emergency care are part of life and are a major reason why people get health insurance even if they are not every day occurrences. In fact, if anything, the real rise in health care costs over the last century has been for chronic conditions but this seems to be what has caught the public’s ear.
Many of these stories are where the person is caught in the “unhappy zone” on their policy where they quickly burnt through their bronze deductibles but did not or meet or just barely met their out-of-pocket maximums which with ObamaCare plans are usually in the $6,800-$7,500 range. For some, particularly those who have not had a brush with the health care system in a while; it is hard to imagine how expensive it is. Tests like MRIs, CT Scans, EKG, blood tests, cost hundreds or even thousands of dollars an in an emergency scenario they are all done in the space of two hours. Then throw in the doctor’s bill and it adds up fast.
For me, I don’t know what was harder, passing my kidney stone or paying the bill. Some surprises are much worse but somehow it pains people less when their 7k is part of a 70k or 700k bill instead of 8K.
So the question really is what can be done about it if anything? Part of this is a lead up to a greater movement about pricing transparency. PT would force providers to pre-publish their rates. Like the Hammurabi code, consumer advocates want the costs posted on the outside of the hospitals so people can be savvy shoppers and decide where to go before getting treatment.
While I am not unsympathetic to the plight, this is probably far too complicated to reduce to a simple pricing model. This is particularly true for emergency room procedures. For starters, health care has a very ‘inelastic’ demand. When people want it they really want it at which point they are in no position to bargain. In emergencies, the patient often is simply taken to the nearest hospital or trauma center.
Having insurance usually means the rates are pre-negotiated but this does not apply to out of network claims or what procedures they are billed for in the first place. Also, each insurance company has bargained with the providers separately so the cost will vary on each of the thousands of billing codes.
Uninsured patients are the ones who get the biggest surprise but you cannot get blood from a turnip so sometimes the joke is on the provider.
Another big issue I see with Pricing Transparency is how they will measure the quality of services and the value that is delivered. Medical outcomes are heavily dependent on the population that a hospital or provider serves. Lower income communities often have higher rates of chronic ‘issues’ that make treating that population much more difficult. Usually it is the ‘worst’ hospital that has the best trauma unit and just because a doctor has a nice office in the burbs does not always mean you will get the best care.
So who then is the best doctor and what does best really even mean? A good way to measure that is who do doctors go to for their own medical care but that is anecdotal and not something you will find on a chart. Somehow, this will have to be taken into consideration; otherwise the pricing models will be distorted.
God Only Really Knows
When some patients are wheeled into the ER room they are literally GORK. They cannot describe their symptoms and like veterinarians, ER room docs are often forced to make a diagnosis on the spot and by law they literally cannot talk to patients about money. This is not an a la carte situation where the patient can pick and choose what tests and procedures are performed and frequently, particularly with head injuries or possible stroke or heart attacks, the doctors will perform every diagnostic procedure under the sun just so they can safely rule out some of the more remote possibilities. Like a MASH unit, their first job is to triage and stabilize their patients and not worry about how much of their money they are spending.
Our job as your broker
We don’t like surprises either and there are a number of best practices that we engage in to try and prevent them. First, we always recommend major medical insurance and discourage people from buying plan shares and voluntary plans as a substitute. The most important part of your insurance is the out of pocket maximum, bar none. We try not to nag people, but we do follow up if someone is late on their premium. When a client calls about a large claim or one that might be in the making, the first thing we do is check to see if their plan is in force and then what the OOP is. This allows them to not worry about the money and just focus on getting better.
If you need help, Trish in our office will help you sort out your claims. Trying to figure out how much you owe can be a bewildering endeavor and you don’t need to go through it alone. It is not helped by the fact that the bills stagger in, often over several months and for things that you don’t remember or were unaware they were performing.
Another key element is education and reeducation. While this sounds trite, we always take the time to fully explain your plan including the deductibles and OOP; and when warranted, more than once. Most people are generally aware of their exposure but some people can be caught completely off guard. We saw this trend about 15 years ago when HSAs were first marketed and people started increasing their deductibles. They often forgot that the lower premiums where not a windfall.
We also advise clients to fund an HSA if they can. Insurance is there for things you cannot budget for. It often makes sense to go with a high deductible but you can offset the risk by keeping liquid assets handy in case you run into trouble. It is a good idea to store some nuts for winter.
Time to Go
Thank you very much for reading my letters. I hope you enjoyed this one and please feel free to share this with someone else who might like to read it.
Peace & Love,
John Helms & Associates Insurance Brokers
2940 Camino Diablo Ste. 205
Walnut Creek, CA 94597 (925) 287-8600
California Life License # 0702479
With us, You’re a big fish in a small pond.